Albert Einstein said: ” The compound interest is the greatest inventions in the 20th.” According to the article “Beaten by Buffett”,Shareholders in Warren Buffett’s Berkshire Hathaway have seen annualized gains of 20% for the past 45 years. If $10000 was invested by Buffett on October 1st of 1964, the investment would today be worth $80 million. In the calculation formula of compound rate, the “n” is the key to the answer. Buffett’s investment is always long-term. He’s willing to buy a company and holding it for many years and even now with all his success. Buffett’s investment of every stock is never less than eight years. Buffett has another investment rules: “Be cheap; Be patient; Go against conventional wisdom” (when others are greedy you will be to be fearful and when others are fearful you will be greedy). If we fully understand the power of compound interest, we can invest well. However, we should understand it is hard to do.
http://marketwatch.com
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